American, Southwest post profits in June even without federal aid

By: Tracy Rucinski and Sanjana Shivdas Reuters
08:50 07/22/2021

By Tracy Rucinski and Sanjana Shivdas

(Reuters) - U.S. carriers American Airlines and Southwest Airlines said strong bookings made them profitable in the month of June even without U.S. federal aid for workers' salaries, a first since the pandemic began in early 2020.

U.S. airlines, which have received a total $54 billion in U.S. COVID-19 relief through Sept. 30, are turning the page on what they have called the industry's worst crisis ever as aggressive vaccinations earlier this year fuel a travel rebound.

"We are well on our way toward recovery," American Chief Executive Doug Parker and President Robert Isom said in a letter to employees.

American, the world's largest carrier, eked out a $19 million profit for the second quarter to June, including federal aid that covered workers' salaries, compared with a loss of $2.07 billion, a year earlier.

Excluding items, the company posted a second-quarter net loss of $1.1 billion, or $1.69 per share.

American's total revenues jumped 361% to $7.48 billion, above analysts' forecast for $7.34 billion according to Refinitiv data, but still below 2019 levels.

Total operating revenue at Southwest, which is more focused on domestic travel, rose nearly 300% to $4 billion from a year earlier, also above estimates, but fell about 32% from 2019.

Excluding items, its net loss narrowed to $206 million, or 35 cents per share, in the second quarter, from $1.50 billion, or $2.67 per share, a year earlier.

Both American and Southwest have recalled idled pilots and flight attendants and plan to ramp up hiring to meet the rapid return in demand, which has helped the companies' financial position but caused some operational headaches.

"We are intensely focused on improving our operations as we restore our network to meet demand," Southwest Chief Executive Gary Kelly said in a statement.

Rivals Delta Air Lines and United Airlines, which recently reported forecast-beating quarterly revenues, have said they have not seen an impact on bookings from a resurgence in COVID-19 spurred by the more contagious Delta variant.

(Reporting by Tracy Rucinski in Chicago and Sanjana Shivdas and Ankit Ajmera in Bengaluru; Editing by Nick Zieminski)

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